Petroleum: Blessing or curse for Ghana?

A deluge of 'flak' is already falling over Ghana’s infant petroleum industry. People are fighting over it – in very deadly mode – even before a drop of the stuff has reached the surface from down below.

Perhaps, this is as it should be. Petroleum is a national asset that can transform our country’s coffers from being nearly empty to being almost full. And because the asset belongs to all of us, we are all interested in how the income from the asset will be distributed.

Frankly, it is an indication of the manner in which this country has gradually descended into financial fascism that we know so little about those who are going to exploit or who are going to benefit from our petroleum and gas deposits, what our government’s share will eventually be – in fact, as against supposition – and how that proportion was arrived at – when, why and on whose advice, as per 'due diligence'.

Isn’t it amazing that it took a series of obviously political insinuations to ferret out a couple of Ghanaian names associated with Kosmos, the company which brightened our faces by announcing a find called ‘Jubilee’? And what about the only-now-publicised Tsatsu Tsikata connection?

And isn’t it shameful that it was only when Kosmos announced it was going to sell some of its holdings in assets – which belong to all of us – that we began to learn that it had apparently had access, for some time, to information collected by our own national oil corporation? Why was the corporation sitting on the info?

Such a cynical approach to an industry as politically sensitive as petroleum is self-defeating, as everyone can now see, as they put their publicity machines into overdrive, in the service of damage limitation. For in the current atmosphere, the public does not believe anyone at all. Even as prestigious an institution as Forbes magazine, whose estimates of what rich people and companies are supposed to own are accorded near-biblical authority, has been found wanting whilst commenting on the Ghana economy, just because it has been made to appear to be linked with a campaign to twist the arm of the Ghana government to make it change its position regarding a petroleum transaction. Forbes engaged in special pleading? What is the world coming to, huh?

It is to be hoped that the unpleasantness that has surrounded the oil industry in Ghana – to the extent that even the integrity of the US Department of State, or its visa-issuing arm – will persuade our government to torpedo the long-held tradition by which Ghanaian administrations have regarded information on national economic matters as a state secret to be doled out only to a favourite few, so that they can benefit privately from public largesse, albeit, in a private-enterprise guise. I repeat: we are running economic fascism, pure and simple.

If there happens to be an oil spill (God forbid), it isn’t only people who have access to international finance-capital who will pay a dear price, but poor fishermen, the dependants of poor fishermen, and those who earn a meagre living by servicing the tourist industry (such as it is) who will be unable to lift their hands to their mouths any longer.

The stupidity of the idea that any group of people, or even individuals, can be so 'powerful' in our society that they corner a national asset with as high a profile as petroleum and gas is beyond belief. Yet an attempt has undoubtedly been made to do just that, as if interest versus counter-interest were invented yesterday or that its operational mechanism could be banned from Ghana.

I saw some of these intrigues in the early 1970s, when we witnessed the modus operandi of a company called Agri-Petco. It made a lot of noise about finding oil around Saltpond. But up till today, I don’t know who brought Agri-Petco to Ghana (Ghanaians that is.) I don’t know when Agri-Petco left Ghana either, and exactly why they left. We all assumed that they hadn’t been able to realise the amount of oil from their wells that they had announced they would be able to bring up. Were they right? Were they wrong? We didn’t know. We didn’t even know whether our government had the capability to cross check the information they made available to it. They did what they liked and left when they didn't like what they were finding in Ghana – no information given publicly and no questions asked either. Why ask questions which no one would bother to answer?

When I talk about ‘economic fascism’, some people might think I am using too strong a term. But I am not: I remember that during 1979, when we were in the incredibly hazardous position of having to ration petrol in Ghana, Agri-Petco was still carrying on exporting its crude oil abroad, in precisely the way it had done before we ran out of petrol. Many of us assumed that they were doing that because the agreement the Ghana government had signed with the company gave them the right to export their crude, irrespective of what was happening in Ghana, even if what was happening in Ghana amounted to an ‘insurrection’ that could legally be regarded as ‘force majeure’.

But apparently the true explanation must have been that the crude they were getting from their wells in Ghanaian waters wasn’t suitable for our refinery at Tema. Or so I was told recently by someone, who added that Tema uses heavy crude, whereas the Agri-Petco stuff was 'light'.

I accepted that explanation because I thought the person who offered it ought to know. On the face of it, one should, however, have pointed out that we do buy crude oil from Nigeria, and that most of the Nigerian crude is also light! It is called ‘bonny light’. Admittedly, Nigeria also produces Brass River, Qua Iboe and Escravos blend, among others. But what exactly was Agri-Petco getting from Ghana? Why don't we know the answer?

Even today, do we, as members of the public, actually know the type of crude we get from Nigeria? I don’t think so. Shouldn’t we have been told, at the time Agri-Petco was around, why we weren’t getting any of its crude? Apparently our government didn’t think it necessary. What if we worried our heads about why we were exporting oil when our refineries’ tanks were empty? It is the government’s business, not ours. Or more precisely, it is Tema Oil Refinery’s business. What if Tema Oil Refinery belongs to all of us?

The same cavalier attitude was taken by the Nigerian government towards the petroleum industry, which is its biggest foreign-exchange earner and also the greatest contributor to national income. Until recently, the new Minister of Petroleum Resources Diezani Alison-Madueke says she is trying to get a ‘petroleum industry bill’ passed by the National Assembly, which will ‘unify’ all the many laws (at least 16 at the last count) governing the industry in Nigeria and bring as much transparency to the industry as possible.

The ‘objectives’ of the bill are to bring: ’transparency, accountability and good governance’ into the petroleum industry of Nigeria. It will create an open framework, by eliminating confidentiality of:

- All texts of licences, leases, contracts and amendments
- Amounts of revenue payments to government by individual companies
- All geological, geophysical, technical and well data
- Production, lifting/quantities and values lifted.

According to the minister, the bill also contains ‘stringent guidelines’ that will ‘protect the environment from oil spills and other forms of degradation’.

In an interview with CNN in London, Alison-Madueke acknowledged that about 9 million barrels of oil may have been spilled in the Niger Delta, dating back ‘to 1938 when oil exploration and production started’. The spills were due mainly to ‘piracy and misapplication of the country's laws,’ she said. ‘We have seen so many pirates. The militancy in the Niger Delta obviously created problems. There was piracy in terms of bunkering but there may have been some misapplication of laws over the years.’

‘As we see it now,’ she continued, these things have become ‘a thing of the past, because we are implementing extremely stringent laws, processes and procedures … to ensure that environmental degradation is addressed in time and is effectively remedied.’

The minister expressed the hope that the Petroleum Industry Bill would be passed ‘in the next four to five weeks’, adding that the government was trying to persuade the National Assembly to sacrifice its August recess and pass the bill. The government wanted to address ‘not only the issue of environmental degradation but also [to] ensure greater equity and participation of the Niger Delta communities in the oil and gas sector’.

On the face of it, this should bring progress in an industry that has long been synonymous with opaqueness and the corruption it engenders. The Ghana National Assembly ought to send a delegation, accompanied by oil industry officials, to Nigeria to listen to the Nigerian National Assembly debates on the issue. For it is the fool who says ‘it only concerns my neighbour but not me.’ It took Nigeria over 30 years of unconcern to come to the realisation that even an apparently supine populace could tolerate only so much cheating and thievery and that after a while it would react – as the Delta communities are now doing.

If Ghana does not know, it ought to realise – sooner rather than later – that the current Nigerian situation is a rehearsal of what could be waiting for us. Yet the other day, on Canadian television, a businessman in Takoradi was seen boasting that ‘oh, the type of situation in Nigeria cannot happen in Ghana.’ How does he know? Hmmm … let him rest in his fools’ paradise. For the rest of us, our guiding principle should be that to be forewarned is to be forearmed.

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* Cameron Duodu is a journalist, writer and commentator.
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